Reporting significant global entity status for large private groups

What large private groups should know about assessing and reporting significant global entity status.

Last updated 29 January 2026

What this guidance is about

Privately owned and wealthy groups (private groups) need to:

assess whether group members are significant global entities (SGEs)
complete the relevant SGE label in Australian income tax returns for entities that are SGEs. This applies to company, trust, fund and partnership income tax returns.

SGEs may be subject to increased penalties and certain tax integrity measures (such as multinational anti-avoidance law and diverted profits tax). Where an SGE is also a country-by-country reporting entity, it may have additional reporting obligations. For more information, see Consequences of being an SGE.

This guidance provides clarity on:

SGE status reporting and record-keeping expectations
low-risk scenarios where self-assessment and reporting of SGE status (income tax return disclosure) is unlikely to raise compliance concerns.

When the SGE definition applies to private group entities

The SGE definition requires consideration of accounting principles used to prepare consolidated financial statements.

From 1 July 2019, the SGE definition applies to members of a group consolidated for accounting purposes or a notional listed company group with an annual global income of $1 billion or more. The term 'notional listed company group' refers to a group of entities that would be required to consolidate as a single group for accounting purposes, assuming that:

a member of the group was a listed company
any exceptions to consolidation under accounting principles are disregarded (for example, the investment entity exception and materiality rules).

This means that the definition of an SGE applies to entities in private groups, including:

individuals
private companies
trusts
partnerships
self-managed superannuation funds
any entities that would be exempt from consolidation.

Importantly, the SGE definition is not limited to multinational groups. It can apply to entities in wholly domestic private groups.

Annual self-assessment and tax return disclosure

Entities belonging to a private group should self-assess each income year whether they are SGEs. If an entity's assessment identifies that it is an SGE, it must complete the SGE label in its income tax return to disclose its SGE status for that year.

If a private group does not prepare global financial statements or have adequate consolidated financial statements that accurately represent the annual global income of the global parent entity (GPE), they should:

identify the GPE and all members of the notional listed company group, using the relevant accounting principles such as Accounting Standard AASB 10 Consolidated Financial Statements (AASB 10) (disregarding any exceptions to consolidation)
determine the annual global income (assuming global financial statements were prepared).

Where an entity has checked the relevant SGE label in its tax return, we'll generally accept their self-assessed SGE status for that income year.

Record keeping for private groups

When self-assessing SGE status, the private group and its controlling minds should prepare and retain all relevant records supporting the assessment outcome. This includes records relevant to assessing whether an entity controls one or more other entities according to accounting principles.

Examples of records

The following are examples of the type of records we expect to be kept:

Group structure information and details of all entities in the private group, including whether they are controlled by the GPE according to the relevant accounting principles.
Consolidated financial statements for the entire group or, if unavailable or inadequate, accurate and complete stand-alone financial statements for each member of the group.
Calculations of total annual income or annual global income of all members of the group.
For
- Companies – company constitutions, shareholder agreements and share registers recording the beneficial ownership and any movements for each class of share.
- Trusts – trust deeds (including all amendments), trustee resolutions, minutes of trustee meetings, letters of wishes or other documents or agreements relating to the appointment of trustees and exercise of trustee powers. If the trust is a unit trust, unit holder agreements and unit registers recording the beneficial ownership and any movements for each class of unit.
- Partnerships – partnership agreements and capital contribution agreements.
- Self-managed superannuation funds – fund trust deeds, minutes of trustee meetings and details of fund trustees and members (including all changes).

Control through contractual or other arrangements

Holding equity instruments with voting rights may indicate an entity can obtain or exercise control over another. However, where control of an entity is not obtained directly and solely from voting rights granted by equity instruments, it may arise through contractual or other arrangements.

In these circumstances, determining control for an entity should also involve assessing the contractual arrangements, any other arrangements, and dealings between the entity and other parties that have the power to direct or influence the entity’s operating, financing and capital decisions, together with exposure or rights to variable returns arising from those decisions. The assessment should look at both the substance and legal form of the arrangements.

The following records used to assess and determine control according to accounting principles should be retained:

Documents recording the purpose, design and structure of the entity.
Details of each other party's involvement in the creation of the entity and structuring of its operations.
Details of each other party's role in and influence over decision making for the entity.
Agreements and details of any contractual arrangements governing the decision making for the key managerial, operational and financing affairs of the entity.
Details of any remuneration agreements and credit or liquidity support arrangements in place between the entity and one or more other parties.
Documented analysis regarding control over the entity according to accounting principles.
Independent opinion about control over the entity according to accounting principles, prepared by suitably qualified practitioners, for example, registered company auditors, full and fellow members of professional accounting bodies.
Documented analysis of the substance of arrangements between entities, especially where the existing documentation and legal form do not align with the substance of the arrangements.

Examples of SGE self-assessment

The following examples illustrate circumstances where private group entities have self-assessed as being SGEs based on relevant records, dealings and arrangements.

Example 1: private group structure involving a discretionary trust

Jessica Group Pty Ltd (Jessica Co), an Australian private company, is the head company of an income tax consolidated group formed with its wholly owned subsidiaries.

Jessica and her husband, David, are Australian tax residents and managing directors of Jessica Co. All shares on issue in Jessica Co are held by Trustee Co as trustee for the Jessica Family Trust, a discretionary trust.

Jessica is the sole director and shareholder of Trustee Co. She is also the sole appointor of the Jessica Family Trust.

The trust deed for the Jessica Family Trust contains the following clauses governing the determination of income and capital of the trust:

Jessica, David and their 2 children are the primary beneficiaries of all income and capital of the trust, in the shares and proportions that the trustee, in its absolute discretion, may determine anytime during each year of income.
If the trustee fails to make a determination in respect of income of the trust during a year of income, such income will be held upon trust for the benefit of Jessica’s siblings.

In each of the previous income years, the trustee determined to distribute all of the trust income to Jessica, David and their 2 children in different proportions.

During the income year ended 30 June 2025, Jessica Co has an annual income of more than $1 billion for the first time.

SGE self-assessment

Trustee Co, acting as trustee for the Jessica Family Trust, considers the relevant information and documents in determining whether it controls Jessica Co and its subsidiaries. These documents include:

company constitutions
shareholder agreements
actual dealings with Jessica Co and the subsidiary companies.

Trustee Co (acting as trustee for the Jessica Family Trust) determines, in accordance with AASB 10, that the trust controls Jessica Co.

Jessica also considers the relevant information and documents in determining whether she controls the Jessica Family Trust. This includes:

the trust deed
current year and historical trustee resolutions
her involvement in the creation and structuring of the trust
her role in and influence over decisions made regarding the trust.

Jessica determines, in accordance with AASB 10, that she controls the Jessica Family Trust because she is the appointor and a beneficiary of the trust, as well as the sole director and shareholder of the trustee company.

Jessica considers that:

she is the GPE of a notional listed company group comprising herself, Trustee Co, Jessica Family Trust, Jessica Co, and the subsidiaries of Jessica Co
the group has a total annual income of more than $1 billion for the income year ended 30 June 2025.

SGE status reporting

In their income tax returns, Jessica Family Trust, Trustee Co and Jessica Co (as head company of the tax consolidated group) each declares they are an SGE for the income year ended 30 June 2025.

End of example

Example 2: merger and acquisition involving private group entities

Trains Co Pty Ltd (Trains Co) is an Australian private company and reports an annual income of $10 million for the income year ended 30 June 2025.

The trustee for Lucas Family Trust (Lucas Trust), which is part of the Lucas Family Group ultimately controlled by Lucas, beneficially owns all the shares in Trains Co. The Lucas Family Group operates family businesses and has never had total annual income of more than $20 million in any income year.

No entities in the Lucas Family Group, including the Lucas Trust and Trains Co, have previously reported being SGEs in their income tax returns.

Acquisition

Amelia Group Pty Ltd (Amelia Co) is an Australian private company and a member of the Amelia Family Group.

The Amelia Family Group is a large private group. The total annual income across all the members of the group is more than $1 billion for the income year ended 30 June 2025. The entities in the Amelia Family Group, including Amelia Co, report as SGEs in their income tax returns.

During the income year ended 30 June 2025, the trustee of the Lucas Trust successfully negotiated and completed the sale of Trains Co to Amelia Co.

After the sale, Amelia Co becomes the beneficial owner of all the shares in Trains Co. As part of the sale agreement, Lucas will remain a director and the CEO of Trains Co to continue managing the business' key commercial and tax aspects for the next 5 years.

SGE self-assessment

There has been a change in ownership of Trains Co during the income year ended 30 June 2025. Amelia Co considers the relevant information and documents in determining whether it controls Trains Co, including:

the company constitution
the shareholder agreement
the share register
Lucas' ongoing employment arrangement along with his role in and influence over the decision making for Trains Co.

Amelia Co determines, in accordance with AASB 10, that it controls Trains Co after the acquisition. Being a member of the Amelia Family Group, that has total annual income of more than $1 billion, Trains Co is self-assessed as being an SGE for the income year ended 30 June 2025.

Train Co's prior membership of the Lucas Family Group is not relevant to determining whether Train Co is an SGE for the income year ended 30 June 2025. For more information, see Joining or leaving a group.

SGE status reporting

Trains Co reports as an SGE in its income tax return for the income year ended 30 June 2025.

End of example

Low-risk scenarios for SGE status reporting

We view certain private group scenarios as presenting a lower risk of incorrectly self-assessing and reporting SGE status. Private groups in low-risk scenarios may be subject to limited forms of verification and are unlikely to raise compliance concerns regarding the SGE classification of entities for that income year.

A private group will fall within a low-risk scenario where the annual global income across all its members is likely approaching $1 billion and:

its entities satisfy all criteria for either Category 1 or Category 2 of low-risk scenarios shown below
the private group doesn't exhibit any of the features listed under exclusions from low-risk scenarios.

Wholly domestic private groups may fall under one or both categories.

Our approach aims to support private groups in mitigating and managing risks of incorrect SGE classification.

Criteria for low-risk scenarios

Category 1 – Domestic operations

These are the criteria for entities within a wholly domestic private group to be considered low risk:

You're an entity that is part of a private group.
The private group comprises one or more Australian resident entities.
One or more individuals ultimately beneficially own the private group or otherwise are the controlling minds of the private group.
You and all other entities in the private group do not have any operations or related parties outside Australia.
For the current income year and for each of the 4 income years before the current income year, you and all the other entities comprising the private group meet all the following conditions
- all reporting obligations have been met on time
- no administrative penalties have been imposed relating to statements, positions that are not reasonably arguable or schemes
- no penalties have been applied for contravening the tax promoter penalty laws.
For the current income year, and for each of the 4 income years before the current income year, each of the entities comprising the private group meet either of the following conditions
- The entity was not required to undertake country-by-country (CBC) reporting or public CBC reporting, or lodge general purpose financial statements (GPFS) with either the ATO or the Australian Securities & Investments Commission (ASIC).
- Where the entity was required to undertake one or more of the following for a prior income year – CBC reporting, public CBC reporting, or lodging GPFS with either the ATO or ASIC – the obligations have been properly met.

In assessing which entities comprise the private group and whether the above factors are present, you should include all entities, including all companies, trusts or partnerships that are associated with, controlled by, or potentially controlled by, the individual beneficial owners and controlling minds of the group.

Category 2 – Total annual income less than $1 billion

These are the criteria for private group entities to be considered low risk:

You're an entity that is part of a private group.
The private group comprises one or more Australian resident or offshore entities.
One or more individuals ultimately beneficially own the private group or otherwise are the controlling minds of the private group, and each of the following is satisfied
- You have kept relevant accurate, contemporaneous records including financial statements for each entity comprising the private group, in line with the record-keeping for private groups section of this guidance, as part of governance procedures to self-assess SGE status.
- Based on these relevant records including financial statements, the total sum of the income across all entities in the group (including the individuals who ultimately beneficially own the private group and, if different, the individuals who are the controlling minds of the private group) is less than $1 billion for the income year.

In assessing which entities comprise the private group and calculating the total sum of income for the income year, you should include all entities, including all companies, trusts or partnerships, that are associated with, controlled by, or potentially controlled by, the individual beneficial owners and controlling minds of the group.

Exclusions from low-risk scenarios

A private group will not be considered low risk if any of the following apply:

An entity in the group, including the individual beneficial owners and controlling minds, has received a notice from the Commissioner determining that the entity, its GPE or another group member, is an SGE for the relevant income year.
An entity in the group has disclosed being an SGE in its tax return for the relevant income year and subsequently amends or attempts to otherwise revoke its SGE status for that year.
Financial statements or accounting records for any entity in the group materially understate income in accordance with accounting principles.
An entity in the group is unable to readily explain and substantiate its self-assessed SGE classification.
The substance of arrangements between entities in the group materially deviates from the documented contractual arrangements and/or governing documents.
The beneficial owners and controlling minds can't be readily and reasonably determined from existing documentation or initial taxpayer engagement.
There is a refusal to provide records relevant to the entity's self-assessment that a low-risk scenario applies.
False or misleading information or statements, or fraudulently prepared documents, are provided to the ATO in relation to a group member’s self-assessment that a low-risk scenario applies.
There is a deliberate act or arrangement that conceals, manipulates or ceases the SGE status for any entity in the group.
There is an artificial or contrived arrangement for avoiding tax involving one or more entities in the group.
The behaviour of one or more entities in the group amounts to fraud or evasion.

Examples of low-risk scenarios

The following examples illustrate circumstances where private group entities have not disclosed being an SGE but fall within a low-risk scenario based on their records, dealings and arrangements.

The examples are general and illustrative, and meant to help explain low-risk situations. They shouldn't be read as a definitive conclusion on similar circumstances, as each entity's circumstances are unique.

Example 3: individuals in partnership and wholly domestic private groups

Linny and Troy are 2 unrelated Australian tax residents who have formed Aus Partnership and jointly operate a business AusCo Pty Ltd (AusCo). Linny and Troy have equal partnership interests in Aus Partnership, which owns all shares in AusCo. Linny and Troy are managing directors of AusCo. No other entity has any interest in AusCo.

Aus Partnership and AusCo reported being an SGE in their income tax returns for the income year ended 30 June 2025. This is on the basis that Aus Partnership controlled AusCo in accordance with AASB 10 and their total annual income exceeded $1 billion. Consequently, these 2 entities don't present a low-risk scenario and the Commissioner will accept the self-assessed SGE status of Aus Partnership and AusCo.

Linny and Troy’s private groups are however independent of each other, and the total turnover of each of these respective groups is approaching $1 billion.

None of the entities in Linny’s private group or Troy’s private group have:

prepared a set of consolidated financial statements that include Aus Partnership and AusCo
reported being an SGE in any tax return lodgments.

SGE self-assessment

Linny and Troy have tested whether their respective private groups control Aus Partnership and AusCo under AASB 10. The partnership agreement between Linny and Troy requires both to act together to direct all key business decisions of Aus Partnership and AusCo, meaning neither can direct key business decisions without the other’s cooperation.

Linny and Troy have kept all documents relating to the ownership and management of AusCo, including the company constitution, the shareholder agreement and management agreement for AusCo.

Linny and Troy have also kept all documentation relevant to their assessment of the SGE status for Aus Partnership. This includes:

the partnership agreement
accurate and complete records of how key business decisions are made
emails detailing the business decision-making process for the income year in question
evidence of situations where business opportunities were not pursued as agreement could not be reached between Linny and Troy as partners.

Category 1 low-risk scenario criteria

For the income year ended 30 June 2025, and for the previous 4 income years, none of the entities in this example:

was a foreign resident entity
had offshore operations or an offshore related party
had an outstanding tax return or late lodgment of any tax returns or statements
was subject to any administrative or civil penalties.

Also, for the same period, none of the entities in this example:

were subject to CBC reporting, public CBC reporting and GPFS obligations (or such obligations were met if they applied)
exhibited any features listed in exclusions from low-risk scenarios.

Outcome

Based on the circumstances described above, this example is considered a Category 1 low-risk scenario. Although the entities in Linny and Troy's respective private groups haven't disclosed as SGEs in their income tax returns, we are unlikely to dedicate further compliance resources to determining whether the entities are SGEs for the income year ended 30 June 2025.

End of example

Example 4: wholly domestic private group structure without SGE disclosure

William and his spouse Linda control a private group. Their combined annual income was less than $1 million per year for each of the 2021 to 2025 income years.

William and Linda are the managing directors of OzCo Pty Ltd (OzCo), an Australian private company. They each beneficially own 50% of all the shares in OzCo. Upon self-assessment of SGE status they identify an arrangement between William and Linda that may indicate William has control of OzCo under AASB 10.

OzCo is the head company of an income tax consolidated group formed with its wholly owned subsidiaries. OzCo and its subsidiaries each prepare stand-alone special purpose financial statements annually.

According to the financial statements, the sum of the total annual income of OzCo and its subsidiaries for each income year was approximately:

$500 million for the income year ended 30 June 2021
$600 million for the income year ended 30 June 2022
$700 million for the income year ended 30 June 2023
$800 million for the income year ended 30 June 2024
$900 million for the income year ended 30 June 2025.

OzCo has not reported as an SGE in its income tax returns.

Side Trust is a discretionary trust established on 1 July 2024. William is the sole appointor and trustee of the Side Trust. The discretionary beneficiaries of the trust include William, Linda and their associated entities.

Side Trust commenced a new business in the income year ended 30 June 2025 and reported total income of $95 million in its management accounts for the 2025 income year.

All of Side Trust’s income is derived from sales and services provided to OzCo and the income would be eliminated upon consolidation had global financial statements been prepared with William as the parent of a group that consisted of William, Side Trust, OzCo and OzCo’s subsidiaries.

Side Trust doesn't report as an SGE in its income tax return for the income year ended 30 June 2025.

Category 1 low-risk scenario criteria

For the income year ended 30 June 2025, and for each of the previous 4 income years, none of the entities in the private group, including William, Linda, Side Trust, OzCo and its subsidiaries:

was a foreign resident entity
had offshore operations or an offshore related party
had an outstanding tax return or late lodgment of any tax returns or statements
was subject to any penalties.

Further, for the same period, neither OzCo nor any of its subsidiaries in the tax consolidated group were determined to have had CBC reporting, public CBC reporting or GPFS lodgment obligations.

None of the private group entities exhibit any features listed in exclusions from low-risk scenarios.

Outcome

Based on the circumstances described above, this example is a Category 1 low-risk scenario. The criteria for Category 2 may also be satisfied, however further information is required to determine this.

We are unlikely to dedicate further compliance resources to determining whether the entities within William and Linda’s private group are SGEs for the income year ended 30 June 2025.

End of example

Example 5: private group with foreign operations has total annual income of less than $1 billion

Jack, an Australian resident individual, is the controlling mind of a private group that comprises multiple entities involved in various businesses and investment activities, including retail, financial services, and property development.

The Australian entities in the private group include:

Jack Business Company Pty Ltd (Jack Business Co), an Australian private company of which Jack is the managing director and majority shareholder with 80% beneficial ownership
Jack Trust, an Australian discretionary trust of which Jack is the appointor, trustee and primary beneficiary
Jack Investment Company Pty Ltd (Jack Investment Co), an Australian private company wholly owned by the trustee of the Jack Trust
Jack Superannuation Fund (Jack Super Fund), a self-managed superannuation fund of which Jack is the trustee and a member
Elite Partnership, an Australian partnership Jack formed with an independent business partner, in which Jack has a 50% partnership interest.

While each entity conducts its own operations, Jack – as the common decision maker – oversees the operations of all these entities.

In 2024, Jack and several independent UK entities incorporated a new company in the United Kingdom (UK), Jack UK Co, to launch a property development business in the UK.

Jack UK Co, a resident of the UK for income tax purposes, is structured so that Jack Business Co holds 70% of the shares and the independent UK entities hold the remaining 30% among themselves.

Jack Business Co correctly reports its dealings with Jack UK Co in the International Dealings Schedule lodged with its income tax return for the income year ended 30 June 2025.

Each business entity prepares stand-alone financial statements to report their financial position and financial performance annually. However, neither Jack, nor any entity in the private group, prepares consolidated financial statements in accordance with Australian accounting standards.

Jack UK Co is a medium-sized company in the UK. It prepares financial statements according to the International Financial Reporting Standards, as adopted by the UK and files financial statements with the UK Companies House.

Category 2 low-risk scenario criteria

Relevant accurate, contemporaneous records including financial statements for each entity within the group have been kept, in line with record-keeping for private groups.

The total sum of the income across all entities in the group, including Jack and Jack UK Co, for the income year ended 30 June 2025 is $900 million.

The private group entities don't exhibit any of the features listed in exclusions from low-risk scenarios.

None of the entities report as an SGE in their respective income tax returns for the income year ended 30 June 2025.

Outcome

This example describes a Category 2 low-risk scenario. We are unlikely to dedicate compliance resources to determine whether Jack and the entities in his private group are SGEs for the income year ended 30 June 2025.

End of example

Example 6: private group structure involving a discretionary trust with total annual income of less than $1 billion

Bob Group Pty Ltd (Bob Group) is an Australian private company that is the head company of an income tax consolidated group formed with its wholly owned subsidiaries.

Bob and his wife Sally are the managing directors of Bob Group. All shares on issue in Bob Group are beneficially held by Trustee Co as trustee for a discretionary trust named the Bob Family Trust.

Bob is the sole director of and indirectly owns Trustee Co. Bob’s ownership in Trustee Co is indirect because all the shares in Trustee Co are beneficially held by Hold Co, of which Bob is the sole shareholder.

The trust deed for the Bob Family Trust contains the following clauses governing the determination of income and capital of the trust:

Sally and their 4 children are the primary beneficiaries of all income and capital of the trust, in the shares and proportions that the trustee, in its absolute discretion, may determine any time during each year of income.
Bob is the secondary beneficiary who is only eligible for distributions of income and capital of the trust if there is no living primary beneficiary.
If the trustee fails to make a determination in respect of the distribution of income of the trust to a primary or secondary beneficiary for a year of income, such income will be held upon trust for the benefit of Bob’s siblings.

In each of the previous income years, the trustee distributed all the income of the Bob Family Trust to Sally and the 4 children in different proportions.

Bob only has minimal interest and dividend income for the income year ended 30 June 2025. Sally and the 4 children don't have income from any source other than the trust distributions they received for the 2025 income year.

Neither Bob nor any entity in his private group prepares consolidated financial statements in accordance with Australian accounting standards. Each business entity prepares stand-alone financial statements to report their financial position and financial performance annually.

Aside from the entities mentioned above, Bob also owns 2 other private companies, Side Co 1 and Side Co 2.

Category 2 low-risk scenario criteria

Bob is initially uncertain about whether he controls the Bob Family Trust under AASB 10. Having undertaken due diligence by reviewing all relevant circumstances regarding his situation, Bob considers it's possible that he may control the Bob Family Trust. However, the total sum of the income across all entities in the group, including Bob, Sally and their 4 children, is $800 million for the income year ended 30 June 2025.

Relevant accurate, contemporaneous records including financial statements for each entity within the group have been kept, in line with record-keeping for private groups.

Accordingly, none of the entities report as an SGE in their respective income tax returns for the income year ended 30 June 2025.

None of the entities exhibit any of the features listed in exclusions from low-risk scenarios.

Outcome

This example describes a Category 2 low-risk scenario. The criteria for Category 1 may also be satisfied, however further information is required to determine this.

We are unlikely to dedicate compliance resources to determine whether Bob, Sally and the other entities in the private group are SGEs for the income year ended 30 June 2025.

End of example

QC105995